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MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3 percent, dragged lower by Chinese markets, with Shanghai shares slumping 1 percent while investors took profits from recent rallies to push Hong Kong equities down 0.6 percent.
Japan's Nikkei average slipped 0.8 percent, weighed by declines in cyclical stocks which are generally linked to the health of the economy.
"Investors are cautious ahead of major events later this week," said Lee Young-won, an analyst at HMC Investment & Securities, referring to Germany's constitutional court verdict on Wednesday which would pave the way for activating the European Central Bank's scheme and the Fed's two-day policy meeting ending on Thursday.
Global shares had slipped and the euro fell at the end of last week as investors took profits from last week's rally after the European Central Bank outlined its bond-buying scheme designed to cap the rise in the borrowing cost of highly indebted euro zone states.
Spain, which has already received aid of up to 100 billion euros ($127.86 billion) from the euro zone to help it shore up its ailing banks, has said it could seek a sovereign rescue once euro zone partners and the ECB provide details on conditions attached and will likely hold discussions at the September 14-15 meetings of euro zone and EU finance ministers.
Europe continues to muddle through its crisis management, with Greece admitting it was having trouble convincing its foreign lenders to accept an austerity plan which is essential to revive the aid payments Athens needs to avoid bankruptcy.
Following Friday's disappointing U.S. jobs data, markets now believe the Fed will opt for some form of further monetary easing this week to help underpin the fragile U.S. recovery.
But views remain mixed over the specifics. Some see a powerful move such as a third round of bond buying known as quantitative easing, while others expect alternative options such as extending its commitment to keep interest rates near zero beyond the current period through late 2014 into 2015.
Reflecting growing investor jitters, the CBOE Volatility index .VIX, which measures expected volatility in the Standard & Poor's 500 index over the next 30 days, closed up 13.21 percent on Monday for its largest daily increase in seven weeks.
The euro rose 0.3 percent to $1.2790, nearing Friday's four-month peak of $1.2815.
"As long as there are expectations of quantitative easing by the Fed, the euro is likely to have some support," said a senior trader at a European brokerage.
While equities underwent an adjustment, policy hopes supported Asian credit markets, tightening the spread on the iTraxx Asia ex-Japan investment-grade index by 2 basis points.
Tight grains threatening
With the euro zone debt crisis severely undermining economic activities in Europe and dealing a blow to the world's growth engine China, which counts Europe as its key export market, the ripple effect is spreading to the rest of Asia.
South Korea announced an incremental stimulus package on Monday to nurse its export-driven economy through prolonged hard times, a move many Asian governments are expected to follow as Europe slides towards recession and the United States struggles to grow.
There were some bright spots amid general wariness. Big Japanese manufacturers' turned optimistic for the first time in four quarters in July-September. And Australian business conditions improved in August as most firms enjoyed a rebound in sales and profits.
But soaring prices of grains pose a big threat to the vulnerable global economy.
Australia, the world's No.2 wheat exporter, cut its forecast for wheat production in the 2012/13 crop marketing year and warned that yields could fall further.
Global grains prices have been bolstered by tight supplies as the worst drought in at least half a century hit U.S. farmland while Russia, the No. 4 wheat supplier, could limit exports.
"The tight supply is driving grains prices higher and they will remain elevated until demand subsides, when the number of cattle dwindles on scarce feed," said Masayo Kondo, president of research firm Commodity Intelligence in Tokyo.
"It will take about a half year for this cycle to complete and grains prices to start falling. Until then, inflationary pressures will mount and undermine global economies," he said.
Global monetary easing in itself does not necessarily put additional upward pressure on grains prices, but it will boost prices of precious metals, nonferrous metals and oil where speculative money typically flows, Kondo said.
U.S. crude eased 0.2 percent to $96.34 a barrel while Brent inched down 0.1 percent to $114.69 a barrel.
Spot gold added 0.3 percent at $1,730.54 an ounce, below a six-month high of $1,741.30 touched on Friday.
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